Fuel stock satisfactory, no worries over future supply

With six months' supplies in the process, scheduled monthly arrival of cargo and assurance of additional funds for import payments, Bangladesh's energy scenario is not something to be panicked about, officials have said after a week of austerity measures that gave them some breathing space.

The state-owned Bangladesh Petroleum Corporation (BPC) has said it has diesel and furnace oil stocks for 32 days and more refined fuel is coming in a day or two. It will get an additional $500 million loan from a global lender which will give some relief in repaying oil import bills.

The energy ministry claims that oil imports to meet the demand for the next six months are in the pipeline.

Infographic: TBS

The BPC on Wednesday announced that it has a diesel and furnace oil stock for 32 days, the top consumed products in the country, while the stock of octane, petrol and Jet fuel for nine days, 15 days and 44 days respectively. 

ABM Azad, chairman of the BPC, told the media that another 50,000 tonnes of refined fuel will reach the country within a day or two. 

He also said that it has a six-month oil import plan which runs in a cyclic form. 

"The reserve of the fuel that seems low today will be higher after three days. This is a cyclic issue. Everyday stock moves up and down," he said. 

Project to boost local gas fields

Meanwhile, the cabinet committee on purchase yesterday approved separate projects to boost output in local gas fields expecting an additional supply of 50mmcf from next year and 270mmcf of gas by 2025.

It allowed two gas exploration and production projects to boost the gas production from the local fields. The completion of these projects would improve the gas supply to the national grid in the next year. 

BPC maintains a 45-day supply

Sources at the BPC said each month, the country consumed around 5 lakh to 5.20 lakh tonnes of different types of fuel of which 76% was met through imports.  

Fifty percent of the purchase has been procured through government-to-government contracts and the remaining 50% through open tenders. 

Each month it received around 16-17 fuel-laden tankers to be off-loaded at the BPC's depots. 

Generally, the BPC maintains a stock of around 45 days along with the daily demand-supply. 

Amid some rumours about the fuel stock, BPC assured yesterday that it has enough stocks and the  corporation has a plan to import 15 to 16 fuel-loaded cargo for August, each with 25,000 tonnes to 30,000 tonnes capacity, said BPC sources. 

At a media briefing at his office, BPC Chairman, ABM Azad said that there is no reason for worries about the fuel stock. 

"Today we have 32 days' diesel demand. After this period you will see that an additional 4 lakhs tonnes of diesel will be stocked. Each month we have to keep a stock of 6 lakhs tonnes of all types of fuel," he said. 

Addressing the allegation of capped fuel sales at fuel refilling pumps, BPC Chairman said that there is no decision of capping the fuel sale. 

Replying to a question on import bill pressure, he said that they have been facing problems in LC opening due to the dollar crisis. 

"However, this issue is also going to be solved as we are searching for financing from the lenders," he said.  

Besides its long-term lending partner, BPC now wants to take finance from Standard Chartered Bank and a discussion is underway. 

No shortage, says the ministry

In a separate statement yesterday, the Power, Energy and Mineral Resources Ministry said imports of fuel oils to meet the demand for the next six months have been under process.

"A vested quarter is spreading false and fabricated information about oil reserves which is misleading the public," said the ministry. The ministry binned the rumour about fuel stocks and said there are sufficient fuel oils in the depots of the companies under Bangladesh Petroleum Corporation, and more are in the pipeline.

At present, there is no shortage of fuel oil in the country, it assured in the statement. 

Fuel oil will continue to arrive in Bangladesh for the next six months according to the import plan. 

There is no risk of shortage, assures the power ministry, urging more austerity in use of fuel oil supplied at subsidised prices.

IITFC to lend more funds to BPC 

The BPC pays the crude oil's import bill through International Islamic Trade Finance Corporation's (IITFC), a member of the Islamic Development Bank (IDB) Group. 

Generally, BPC takes around $800million each fiscal year. However, IITFC has approved $1400million to BPC for this fiscal year, sources at BPC said. 

Sources said that, in addition to the normal finance, BPC now asked for an additional $1000 million for the current fiscal year, of which IITFC agreed to lend $500 million. 

This financing will help the state corporation to open LCs in time without any hassle.

Gas production initiatives expedited  

Besides ensuring the liquid fuel's supply, the government also initiated scaling up the gas production of the local fields on Wednesday. It has approved two gas exploration and production boost projects proposed by the Sylhet Gas fields and Bangladesh Gas Fields Limited. 

The cabinet division approved the purchase proposal of a drilling operation equipment, third-party engineering service and civil work under the Sylhet-10 Exploration Well Drilling project which is expected to be completed by December 2023. 

Md. Mijanur Rahman, Managing Director at Sylhet Gas Fields told The Business Standard that along with these projects they have plans to add additional 270 mmcf gas to the national grid by 2025, of which 50 mmcf could be added within the next year. 

The Cabinet Division also approved another purchase proposal from Bangladesh Gas Fields Company Limited to set up a Wellhead Compressor at Titas Gas Field E and G location. 

The project will help the BGFCL to keep the required gas pressure in the pipeline. 

Following the volatile LNG price in the global market that hit Bangladesh's gas supply as the government scaled down the import of the energy, Bangladesh Oil, Gas and Mineral Resource Corporation (Petrobangla) chalked out a plan to add additional 600 mmcf of gas by 2025. 

Nazmul Ahsan, Chairman, Petrobangla told the Business Standard that by conducting workover to the existing fields, they want to boost the local gas fields' production. 

At present, the country produces around 2334 mmcf gas from local fields while the total supply is 2837mmcf including 502 mmcf long-term LNG contribution.